Responding to a Wall Street Journal commentary by 4As President Nancy Hill largely blaming tight-fisted marketers for Adland’s inability
to draw top talent into its ranks, Bob Liodice, president of the Association of National Advertisers, responded that agencies would do better to adapt their business models to today’s
marketplace realities instead of playing the blame game.

Writing, as Hill did, in the Journal’s CMO Today column, Liodice asserted: “Agencies have had decades to transform
their business models and adapt to the tight realities that every business in America ascribes to. There is no magic bucket of cash that marketers are keeping from agencies.”

While the
agency model has changed over the years, it has probably exacerbated Adland’s talent problems, Liodice charged. He noted the unbundling trend that agencies launched 20 years ago that split
creative and media offerings into separate shops in a bid to extend client rosters and revenue streams. “This has led to silos, increased overhead, and mixed messaging back to the client,”
he said.

Liodice also pointed to analyst estimates that Adland holding company profits in the current fiscal year will significantly exceed estimates for many big marketers like Procter &
Gamble, Coca-Cola and General Electric. “With these robust financial profiles, why are starting agency salaries so poor? And why are agencies pointing the finger at marketers for their
issues?”

“Poor agency starting pay has been with us for decades,” Liodice argued. “Back to the years of the 15% agency commissions. These were the good old days when we
heard little about ‘unfair’ marketers practices.”

Liodice noted that many marketers are taking agency capabilities in house at a time when “transparency issues are
breaking down trust between agencies and clients.”

Such factors, he added, “have made an agency career less attractive — but the fault does not rest with clients.”

Liodice also questioned how serious the agency community is about changing the status quo. “There has been no call to action for transformative change,” he said.

Yes, starting salaries in advertising have always been low. In the past because there were more grads (including the top students) that wanted to be in this “glamorous” business that combined art and science than the business needed. As times changed the top students went to Wall Street for the money. But the universities were now turning out lots grads, mostly women, with degrees in advertising/marketing and everyone knew you didn’t have to pay them much … even though they were better suited to commercial persuasion.
Then came the great recession. Companies cut back on marketing. Agency income dropped. But the universities were still turning out the bright young people that wanted to be in advertising. Was an ad agency struggling to stay afloat going to pay more than necessary to hire talent? No. In fact, they often didn’t hire at all. They provide non-paid internships to students. The students took them to bolster their resume and with the hope that if they worked really really hard for several months they might get offered an actual low paying job.
That’s where we are today with the top students still going to Wall Street to shuffle paper and make millions. The rest of the marketing/advertising students (mostly female) chasing a limited amount of jobs for low pay at ad agencies.
But the story is much the same on the company side though the pay is somewhat better. Young marketers concerned about keeping their job and not willing to take any risks with their responsibilities. They are fearful of approving daring creative work from the agency. They research all the sharp edges off a breakthrough ideas and we get what you see on TV every night.
It is not the talent that is bad. It is the environment that keeps it hidden.